Supreme Court Rules Human Genes Cannot Be Patented, But...

In a unanimous decision with important implications for biomedical research, the US Supreme Court has invalidated two patents held by Myriad Genetics that form the basis of a widely used genetic test for breast and ovarian cancers. But the court also drew a distinction between the right to patent genes based on naturally occurring DNA and genetic material created synthetically in laboratories.

The ruling came after a protracted battle in which critics charged Myriad was allowed to limit access to potentially life-saving genetic tests for women at risk of developing the diseases. Myriad patented two so-called isolated human genes – BRCA1 and BRCA2 – that account for most inherited forms of the cancers. Each test costs up to $4,000 and the patents prevent other labs from offering tests without paying fees.

In the writing for the court, Justice Clarence Thomas explained that isolated DNA, in which genes are removed from a cell, is a “product of nature and not patent eligible merely because it has been isolated.” The finding was hailed by advocates who challenged the Myriad patents on behalf of several women on the grounds that the situation set a bad precedent for public policy.

“We are thrilled with the decision,” says Sandra Park, senior attorney with the ACLU Women’s Rights Project in a media conference call. “From our perspective, this ruling is a victory.” Based on this ruling, we think patients will have much greater access to genetic testing… The court has lifted a barrier that, for many years, stopped other laboratories from offering genetic testing.”

While the Myriad patents on BRCA1 and BRCA2 expire in two years, she explains that “if it had gone the other way, Myriad has other patents that could potentially interfere with other companies offering genetic testing… Even with these particular patents expiring (in two years), a negative ruled could have had a negative implication on testing.”

Yet at the same time, the court also ruled that cDNA, or complimentary DNA, which is a synthesized version of DNA, is not a “product of nature” and, therefore, “does not present the same obstacles to patentability as naturally occurring, isolated DNA segments.” In other words, manipulating a gen to create something not found in nature is eligible for patent protection.

This is far from the worst-case scenario, however, that many drugmakers and biotechs, among others had feared, because this suggests that there are ways for Myriad and other companies to profit from their research. This helps explain why Myriad stock jumped more than 10 percent when the court ruling disclosed, although the shares later gave up some of those gains.

The ruling “is in line with our base-case assumption that cDNA claims will be upheld and, at least, in line or better than consensus and certainly the bear case, which was fear that all patents would get overturned and the stock could have big pullback,” wrote RBC Capital Markets analyst Michael Yee in an investor note. “We have repeatedly stated this is a win, fundamentally, for Myriad.”

It is worth noting that the US Patent & Trademark Office has already granted patents on some 4,000 human genes, mostly to companies and universities. To what extent any of these may be challenged is unclear.

The case began three years ago, when the ACLU and the Public Patent Foundation sued Myriad (MYGN), the University of Utah Research Foundation and the US Patent & Trademark Office. They charged that Myriad’s refusal to license its patents broadly meant women who fear they may be at risk of having cancer are prevented from having anyone but Myriad look at the genes in question.

As we wrote previously, many women with a familial history undergo genetic tests to determine if they have mutations on their BRCA genes. The info helps decide on treatment or prevention, such as increased surveillance, ovary removal or preventive mastectomies, which actress Angelina Jolie recently underwent. Women who test positive using the Myriad BRACAnalysis test have an 82 percent higher risk of breast cancer and a 44 percent higher risk of ovarian cancer.